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Alternative Assets  | 
Emerging Managers to Invest in Headcount, FinTech to Speed Up Growth

Emerging Managers to Invest in Headcount, FinTech to Speed Up Growth

To expand their companies in 2023, emerging alternative investment managers are placing a high priority on hiring top people and making investments in technology platforms and third-party data suppliers, according to a report from alternative investments fintech Dynamo Software.    

“Increased internal headcount” was identified as the top area of investment to propel fundraising efforts over the coming 12 months in Trends, Challenges & Insights from Leading Emerging Managers, a report based on the results of a survey of leaders across the global emerging manager marketplace representing private equity, venture capital, hedge funds, corporate development, real estate, fixed income, small-cap public equity, and private credit. 

Emerging managers do not appear likely to source fee earnings for additional funds to pay top staff, like their more established GP rivals. In surveys conducted by Dynamo in February and Emerging Managers in March, the same percentage of general partners (88%) said their fee schedule will not change during the following year.   

The three main justifications for integrating technology are “creating efficiencies and optimizing workflows,” “overall cost,” and “empowering the entire team to leverage tech.” Operationally, “removing manual data tasks and introducing automated workflows” were prioritized as being the most important.    

It’s not surprising that emerging managers said they won’t cut back on their IT budgets given the importance placed on data and FinTech. More than half (51%) anticipate a rise in their tech budgets during the upcoming year, while 48% predict no change.   

The top three solutions for future inclusion in the emerging manager tech stack were “fundraising and marketing” solutions, “deal management and CRM”, and “investor relations.”   

More than four out of ten (43%) Emerging Managers anticipate investors would raise ESG and DEI reporting expectations over the next 12 months, with estimates from Deutsche Bank, Bloomberg, and PWC that ESG assets will surpass $100 trillion in five years.

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Inside The Story

Dynamo Software, Inc.

About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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